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Effective Strategy Generation

Effective Strategy Generation

Why effective strategy generation is necessary?

A business enterprise has to generate strategic alternatives and determine the effectiveness of its strategic decisions in order to be successful in the market.

Various approaches to strategy formulations exist and it is a real complex phenomenon in that, a wrong strategic execution may produce irreparable consequences which may prove detrimental to the survival of the firm.

The method of strategy formation usually follows the traditional approach, based on rational and normative disposition. Sometimes different thought processes may also serve as basic premises for the evolution of new strategies.


effective strategy generation


The strategy evolves in the mind of the chief executive without ever being explicitly stated and without the aid of formal procedures. Personal judgment also backs up this process.

People with excellent intuition are often remembered for their imagination, drive and expansive vision leading to corporate growth and prosperity. To look into the future with such creativity and brilliance is the basic premise of this approach.


Disjointed Incrementalism:

This approach towards strategy making reflects an attitude of management having strong preference to act only when there is a need or only when forced to, and then considering a few convenient alternatives involving only small, non-disruptive changes in the organization.

This approach is followed by firms that enjoy a pretty decent profit margin in the existing business and possess an exclusive niche in the market; they will not be ready to come out of their cocoons for fear of failure. The firm cannot take the risk of setting unrealistic goals deviating away from the status quo.


How to develop a strategy


Pic Courtesy: Account Manager Tips

Entrepreneurial Approach:

Systematic risk-makers and takers who look for and find opportunities belong to this category. Entrepreneurs view challenges as opportunities and not as problems.


Key factor approach:

This approach is based on determining the really significant factors that are important in the success of a particular business and concentrating major decisions on it. Say, for instance, a quality product at relatively low price may be a critical factor for a business firm.

But eventually it has to achieve this in order to capture the market whence the same critical factor becomes unique to the company and adds value.


Integrated approach:

  • Analyzing the present internal and external conditions
  • Identifying and evaluating the present strategy
  • Search for strength and weaknesses viewed within the present strategy and environment
  • Considering changes in the present strategy
  • Generating alternatives unified to resolve the problems and exploit the opportunities
  • Developing alternative unified strategies by combining the various alternatives in each of the problem and opportunity area
  • Evaluation of unified strategy in terms of the enterprise objectives and choosing the strategy that best satisfies the objectives.


Strategy formations should conform and comply with the changes in the external environment and the change called for may be in the strategy itself or in the implementation of the strategy.